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Nordic Currencies: Krona Strengthens Versus Euro on Outlook

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Oct. 4 (Bloomberg) -- Sweden’s krona rose versus the euro before a report this week that will probably show industrial production rose for a sixth consecutive month, fanning speculation the central bank will raise interest rates.

The krona snapped a two-day decline. The Oct. 8 report may show industrial production rose 1 percent in August and 17.1 percent year on year, according to a Bloomberg survey of at least four economists. Norway’s krone fell against the dollar before a report on Oct. 7 that’s forecast to show industrial production fell in August.

“You have local real-money funds selling euro and buying the krona,” said Carl Hammer, the chief currency strategist at SEB AB in Stockholm. “We’re still expecting continued krona appreciation.”

The krona appreciated 0.2 percent to 9.2379 per euro as of 1:45 p.m. in Stockholm. It dropped 0.4 percent to 6.7418 per dollar. The krone fell 0.7 percent to 5.8640 per dollar and gained 0.2 percent to 8.0253 per euro.

Hammer said the krona was helped by reports last week that showed Swedish consumer and business confidence surged to the highest in a decade. The central bank’s own forecast indicates it will raise its key rate more than 2 percentage points over the next two years to about 3 percent.

To contact the reporter on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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